Uncertainty high after repeal of net neutrality rules

Uncertainty high after repeal of net neutrality rules
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The Federal Communications Commission’s (FCC) vote last week to scrap net neutrality rules has sparked a vigorous debate about what comes next.

FCC Chairman Ajit Pai and his allies believe the deregulation will induce a new wave of investment in broadband, leading to increased competition and better and cheaper internet for consumers.

Net neutrality advocates, on the other hand, argue the end of the rules will ultimately result in higher costs for consumers, with broadband providers now free to pursue deals with internet companies like Netflix and YouTube.

The effects of the FCC’s policy change will not be clear for some time, experts say. 

“In the short term, little to nothing is going to be changing,” said Doug Brake, a policy analyst at the Information Technology and Innovation Foundation, a nonpartisan technology focused think-tank 

“The [internet service providers] have the best sort of regulatory framework that they could hope for,” Brake said. “I think they’re going to be cautious. To the extent that there are changes, they’re going to be incremental.”

The net neutrality rules had required that all internet traffic be treated equally. That barred internet providers from giving any site or app preferential treatment.

Gigi Sohn, a former policy adviser to past FCC Chairman Tom Wheeler and current fellow at Georgetown Law’s New Institute for Technology Law and Policy, has been a vocal critic of Pai’s move to scrap the net neutrality rules.

But she said the impact of repeal will not be felt right away, especially given that the FCC’s action is now being challenged in court.

“I think you’ll see a drip drip,” Sohn said. “The companies aren’t foolish enough to do anything until this is largely settled.”

New York Attorney General Eric Schneiderman has already announced that he will lead a coalition of attorneys general in suing to preserve net neutrality rules. Consumer groups, activists and others are expected to file their own lawsuits.

Once the litigation is resolved, some net neutrality supporters fear that broadband companies will begin to vary internet speeds for different sites and services.

“There’s going to be fast and slow lanes,” Sohn said. “[Internet service providers] have been cagey about it but it's one of the things the fight has been about. If you’re a consumer and your favorite website doesn’t pay to be in the fast lane, it’s going to load slower.” 

Though internet companies would front the costs for faster speeds, net neutrality advocates warn that consumers could bear some of those costs.

"If you want to talk about fees getting passed onto consumers, that's what is going to happen if paid prioritization is allowed," Evan Greer, campaign director for at net neutrality advocacy group Fight for the Future, told CNBC.

Potentially higher costs don’t end there, either. Net neutrality advocates warn that broadband companies could take advantage of the lack of rules to also charge consumers directly. Without net neutrality rules stopping them, broadband companies could force consumers to pay higher fees to access bandwidth-heavy content such as video streaming.

Net neutrality proponents also fear that these different lanes could harm consumers in a less obvious way by cutting out small startups who can’t afford to cut the same kinds of deals that established companies can.

“If there's something out there more awesome, cheaper and easier to use than Netflix or Spotify, we'll never get to use it because it will never have a chance to compete,” Fight For The Future’s Greer told The Hill over email. 

Pai and his allies say the warnings are overblown. 

Roslyn Layton, a fellow at the conservative think tank the American Enterprise Institute, said there isn’t “a lot of empirical evidence” that ending the rules will lead to higher prices.

“You always want more merchants and more users,” she said.

Layton said scrapping the rules gives internet providers more flexibility to offer services at different price points, which benefits everyone. She pointed to Hello Digital, whose founder sued the FCC on the ground that the net neutrality rules prevented the company from being able to purchase the premium quality connections necessary for the high-definition voice feature it wanted to offer.

Layton believes that relaxed regulations can help such companies who may have been stifled by the rules.